The burden of proving subsequent interstate sales by transfer of documents of title during the movement of goods rests on the assessee, and the findings of the final fact-finding authority should be supported by materials.

CHITRA VENKATARAMAN, J

1. The Revenue is on revision as against the order of the Tribunal relating to assessment year 1995-96. The Tribunal accepted the assessee's contention in the appeal preferred by it as regards the claim of EII sales. The Tribunal however confirmed the addition made on stock variation and deleted the equal addition. Aggrieved by the same, the Revenue is before this Court by way of revision.

2. The assessee herein is a dealer in chemicals, acids and solvents. On 9.9.1995, the Enforcement Wing of the Commercial Tax Department conducted an inspection in the business premises of the assessee and detected stock difference. Apart from this, it was also found that the dealer was effecting in-transit sales after taking constructive or notional delivery of the goods to the value of Rs.9,68,264.70. Thus, apart from assessing the actual suppression detected in stock variation, the assessment for assessment year 1995-96 was taken up proposing to disallow the claim for exemption under Section 6(2) of the Central Sales Tax Act. The assessee contended that after the purchase, even before taking delivery, they effected further interstate sales to their end users within and outside the State of Tamilnadu. Thus, by filing EI and EII and Form C declaration, the assessee made claim under Section 6(2) of the Central Sales Tax Act. The said claim was rejected by the Assessing Authority by taking a view that the assessee had effected sale after arrival of the goods at Coimbatore after taking the constructive delivery of goods at Coimbatore. Thus, the Assessing Authority viewed that the assessee was not entitled to exemption under Section 6(2) of the Central Sales Tax Act. The Assessing Officer pointed out that verification of the records showed that M/s.Mahaveer Chemicals were appointed as registered dealers to deal with the chemicals viz., liquid/ gaseous chemicals manufactured by M/s.Cochin Refineries Limited, Ernakulam, Kerala. Admittedly, the said Mahaveer Chemicals and the assessee viz., Mahaveer Chemicals Industries are located in the same premises,at No. 16/ 56, Mill Road, Coimbatore. On the purchase effected by M/s. Mahaveer Chemicals from M/s. Cochin Refineries Limited, the liquid / gaseous chemicals were transported in tanker lorries. The transport, delivery and use of such chemicals were covered by Central Excise Provisions. As per this, there was no necessity to maintain a godown for storing before distributing to the ultimate buyers. The Revenue pointed out that verification of the purchase invoices, transport documents and other statements, revealed that after purchase, M/s. Mahaveer Chemicals transported them to Coimbatore. The transport documents revealed that the movement of goods started from Cochin in tanker lorries to Coimbatore and had the end destination at Coimbatore, it being the delivery place. After the receipt of the goods in Coimbatore, Mahaveer Chemicals effected EI sale to the assessee herein which was situated in the same premises. Since the sale was effected by transfer of documents of title to goods, while in transit, the sale was treated as one falling under Section 3(b) of the Central Sales Tax Act. However, as regards EII sales, said to have been effected by the respondent/ assessee, it was pointed out that the inspection of the business premises of the assessee on 9.9.1995 revealed that after taking delivery, the assessee had used Form XX delivery notes to transport chemicals in tankers to the end users within and outside the State of Tamilnadu. Thus, the authorities came to the conclusion that on the basis of the available materials, after the endorsement in favour of the assessee herein, the movement of the goods had terminated at Coimbatore itself. Thereafterwards, on the assessee had taken constructive delivery at Coimbatore itself, the assessee effected fresh sale. The authorities held that the claim of the assessee for second interstate sales could not be sustained.

3. A readi